Staying ahead

Competitiveness has become an obsession. Our political leaders may be fascinated with the idea because it bows to business and the markets (which they are in any case unable to control) and handily disguises their waning authority

On 12 July Peugeot announced 8,000 redundancies. The response was remarkably unanimous. Jean-François Copé, general secretary of France’s UMP (Union for a Popular Movement) party, identified an “absolute priority” — “the competitiveness of our industry”. The same theme was picked up later in the day by senator and former prime minster Jean-Pierre Raffarin, who called for a “competitiveness shock” as the only way to stimulate the French economy.

In unison, UMP leaders echoed the message that has been coming from the very top for some time. Jean-Marc Ayrault closed a recent “social conference” bringing together the various players by setting out a fundamental objective — “improving the competitiveness of our businesses”. To justify taking part in the summer university organised by the French employers’ union Mouvement des Entreprises de France, the Socialist economy and finance minister Pierre Moscovici said: “We will be there to confirm that the government is fully determined to take on the economic challenge of competitiveness, since it is only by strengthening our growth potential that we will win the battle for employment”.

Competitiveness is the new buzz word, from the Lisbon strategy which set a new objective for the European Union — “to become the most competitive and dynamic knowledge-based economy in the world” — to the Competitiveness-Employment Agreements launched by Nicolas Sarkozy at the end of his term, and from British bosses’ calls for “tax competitiveness” to their Spanish counterparts’ plans for “industrial competitiveness”.

Nor is it just a matter of business management: now cities, regions and entire countries are supposed to focus their energies on this prime objective. Councillors and politicians are invited to follow the management theories of American business schools: control of production costs (“cost competitiveness”), benchmarking (countries compared and ranked like businesses in a competitive environment), territorial marketing (territories (...)

(3) Karl Aiginger, “Competitiveness: From a Dangerous Obsession to a Welfare Creative Ability with Positive Externalities”, Journal of Industry, Competition and Trade, vol 6, no 2, June 2006.

(4) The final score is based on a combination of “basic needs” (political institutions, infrastructure, macroeconomic stability, health, education) and more complex factors, such as higher education, the level of internal competition in the market and R & D.